Pat Casey (Fianna Fail) | Oireachtas source

As all present are aware, I am involved in the industry. The picture portrayed by Senator Higgins is not true across the board. There is a need to put that on the record. Sadly, VAT is a blunt instrument. It is very inflexible in terms of how it can be applied. The reduced rate was brought in to make business viable. It was not necessarily brought in for it to be passed on directly to the customer. We need to consider what the industry has gone through in the past two years. When one looks past the big chains and the big hotels based in cities to more rural locations with hotels that depend on seasonal business, it is a completely different picture. I refer to tax warehousing. How many small and medium-sized hotels, restaurants and coffee shops had to put their tax into that warehousing because of their inability to pay it back? How much of that is still owed by those businesses?

I have no problem with a report being prepared. If analysis is carried out, we will probably be able to fine-tune things or get a better understanding of the situation. Regrettably, however, there is not the flexibility to apply VAT at a particular rate to a hotel in Dublin but at another rate to a hotel in Wicklow. A holistic approach has to be taken in the context of VAT. On several occasions, I have called for a wider debate on the hospitality industry and the correct VAT rate for the industry. Those in the sector operate in a very high-cost economy here in Ireland. All the input costs are extremely high. That has an effect on the selling price, which has an impact on customers.

With regard to staff, I cannot agree with the broad statement made by Senator Higgins. I lost most of my staff when Covid came. The fact that they did not return was not down to pay; it was because they went home to their own countries, those economies took off and there was no need for them to return to Ireland. It was not all about pay and conditions. I had an incredibly loyal bunch of staff whom I had no choice but to let go. They went home and did not return to Ireland. Senator Higgins suggested that was purely because of pay but there are other conditions that affect whether staff leave the industry and do not return to it. If we had the reports suggested, it is possible that we could analyse this a bit better.